Have you noticed that your local Shoprites seem to be disappearing? Or maybe you're in
Kroger territory, and you've discovered that those stores have also been going the way
of the dodo. The future of grocery shopping is on its way, and it doesn't look so good
for these chains.
Since its founding in 1931, Giant Eagle has been a well-known name in the grocery industry,
now garnering $9.7 billion in revenue among its 460-plus primary and sub-brand locations.
Alas, it's faltered a bit in the last year while attempting to keep up with the evolution
of online shopping and changing consumer needs. They've closed some locations and restructured
others to prevent closure. In August 2021, for example, it was reported that a Columbus,
Ohio Giant Eagle would shut down its 4,000-square-foot dining area because of significant changes
in consumer habits.
Other Giant Eagle locations have shut their doors completely, including a beloved Beaver
County, Pennsylvania store that had been a bright spot for the neighborhood for 25 years.
According to The Beaver County Times, Giant Eagle spokesman Dan Donovan encouraged shoppers
to head to other stores in the area. Additionally, a 30,000-square-foot location in Columbus,
Ohio saw its demise in early January 2021. While closures aren't new to the company,
as it had a series of them throughout 2020, the continued trend through 2021 has us concerned
about Giant Eagle's future.
Kroger may be one of the biggest household grocery brand names, but that doesn't make
it immune to controversy. Best known for its private-label products, organic food selection,
and perky rewards program, the company experienced pushback from its workers and loyal consumers
when it vocalized its concerns about hazard pay for grocery workers. The payments, which
are mandated in select jurisdictions, provide frontline workers with additional pay for
their work throughout the COVID-19 pandemic.
"Fight for $2 an hour. We shouldn't have to do that. We shouldn't have to do that."
In 2021, Kroger began shutting down locations in areas with hazard pay mandates, citing
higher payroll, reduced margins, and a tough revenue balancing act, as reported by Forbes.
Kroger stores aren't at the top of the list to go, though. Instead, it's Kroger Company's
other brands, Ralphs and Food 4 Less, that are taking the hit. In the first quarter of
the year alone, the company revealed seven closure announcements for its sub-brand locations
across Los Angeles, Long Beach, and Seattle, all of which mandated hazard pay.
As they head towards 2022, the company still appears to be struggling. Reuters reported
in September that the company's shares declined a whopping 9.1%. Kroger places much of the
blame on supply chain problems that company officials don't believe will correct themselves
anytime soon.
Known mostly in and around its birthplace of St. Louis, Missouri, Schnucks has more
than 100 locations across its home state, as well as Illinois, Indiana, Iowa, and Wisconsin.
Shoppers in much of the United States may not be hit too hard with Schnucks' recent
string of closures, but the areas its stores serve certainly have been.
Starting around late 2019, Schnucks closed down three stores in the St. Louis metro area,
primarily because of reported "poor sales." However, the company also blamed those locations'
lack of success on there being too many Schnucks stores in one area. Either way, the closures
continued into 2020, including a Bettendorf, Iowa location, due to lack of profits.
The new year brought even more closures. In February 2021, a Green Park, Missouri store
served its customers one last time. Then in June, the company announced that it would
close its Shrewsbury, Missouri location for being less profitable than it had hoped when
Schnucks acquired the building. By September 2021, Schnucks said that labor shortages were
forcing them to close many of their stores an hour earlier each day. Still, the small-town
grocery chain remains hopeful that many employees will stick around and new ones will come aboard,
as they announced career fairs and a $600 retention bonus for eligible workers.
Back in 2017, Amazon set out to acquire Whole Foods, a grocery chain that prioritizes organic
and natural foods and products, after it began to crumble under the pressure of newer, similar
companies undercutting their prices. Amazon was successful, of course, and the merger
seemed to be an incredible force in the grocery industry, at least initially. But the data
points tell a different story. Whole Foods makes up a large portion of Amazon's sub-brand
brick-and-mortar locations. According to GlobalData Managing Director Neil Saunders, Amazon's
physical retail revenue fell by 16% year-over-year in the first quarter of 2021, as Saunders
also called Whole Foods Amazon's "weak spot."
According to Business Insider, data from the end of 2020 shows that Whole Foods stores
had 21% less foot traffic compared to the previous year. While this could've been closely
linked to people staying home more often during the pandemic, there's also another issue that's
likely at play: Whole Foods has yet to go online like many other modern grocery stores
are doing.
Customers need to use Amazon Prime to order groceries online from Whole Foods, as Whole
Foods has no proprietary ordering service. The problem is that in-store shoppers may
find more crowded stores and long lines because of the Amazon Prime workers preparing orders
for online customers, thereby making for a less-than-ideal shopping experience.
Branding itself as the first self-service supermarket in 1916, Piggly Wiggly pioneered
the modern grocery shopping experience in which customers shop for themselves rather
than having a clerk do it for them. Despite that groundbreaking start, though, nowadays
the company's stores only exist in 15 states. Some of its 500 locations have been left off
its roster heading into 2021, like the one in Grantsboro, North Carolina. After 50 years,
this store closed its door in February, with owner Billy Flockhart citing its proximity
to other grocery stores as the primary problem.
Another Piggly Wiggly in Aliceville, Alabama closed in May after more than six decades
in business to support its owner's retirement. And others, like the one in Dothan, Alabama,
have had to shut their doors temporarily due to labor problems. The future of Piggly Wiggly
is currently up in the air with C&S Wholesale Grocers reportedly buying out 11 stores in
the midwest. While the acquisition details aren't public yet, Piggly Wiggly Midwest president
Paul Butera Sr. has said,
"C&S has the experience and knowledge to ensure that this 100-year old icon continues for
the next 100 years."
The struggles for Save-A-Lot began a few years ago when the company started losing money,
eventually racking up more than $800 million in debt by August 2019, as reported by Bloomberg.
In just the first two months of 2020 alone, the grocer shut down seven stores in Delaware,
Illinois, Florida, Indiana, and North Carolina, so as to lower its debt and pull the company
out of its lost revenue streak. The rest of the year and the beginning of 2021 weren't
too kind for Save-A-Lot either.
While the company successfully cut out about $500 million in debt, it had to sell several
of its stores to get there and make deals with lenders and buyers to close others and
sell stores to other companies to continue climbing out of the hole. Grocery Dive reported
that as of January 2021, Save-A-Lot transferred 82 of its stores to new owners and still planned
to sell more than 300 others. One Dayton, Ohio location that shuttered in October 2021
was particularly painful for its customers. As the local CBS station reported, many shoppers
were left feeling as if Save-A-Lot failed the neighborhood and its need for quality
foods.
"If you keep doing that, it's like you're telling these people that they don't mean
anything to you."
It may be the largest employer in New Jersey, but ShopRite has had many wondering whether
it will be able to continue competing with larger grocers after a series of recent store
closures. In 2019, The Philadelphia Tribune reported that an Overbrook neighborhood ShopRite
closed down, only for customers to learn that others in the area may soon be on their way
to shutdowns as well. As owner Jeff Brown told the paper,
"I have two stores that are losing a substantial amount of money. There's term left on their
leases, but they're not financially viable in their current state with this [sweetened]
beverage tax."
"It's the only supermarket around here that's close by for the older folks and for the neighbors.
You know, they got to travel super far to go to another one."
Then in 2021, ShopRite announced the closure of 62 of its in-store pharmacies, with spokeswoman
Karen O'Shea pointing to pharmacy competition as the primary blame. As she put it,
"We were unable to sustain sufficient sales despite our marketing efforts."
Other stores shut down completely following the pharmacy closures, including one in Newburgh,
New York, and another in West Babylon, New York. The latter reportedly closed due to
low, unsustainable sales.
Dollar Tree enthusiasts know that its stores feature some enticing grocery aisles, with
certain locations even offering full refrigerator and freezer sections. For more than three
decades, the chain has been a hit with consumers who like to shop affordably for household
goods, party supplies, and beauty and bath items, all for one dollar or less. But 2021
included some surprising news when Dollar Tree announced that it plans to raise its
prices in 2022.
This isn't necessarily a completely new idea from the company, which turned some of its
stores into Dollar Tree Plus locations with a selection of items that cost more than a
dollar. By the end of 2021, the company plans to have some 1,500 Dollar Tree Plus stores.
However, most prices will rise to $1.25 in all stores in the new year, even those not
currently following the Dollar Tree Plus model. CEO Michael Witynski attributes the change
to wage and cost increases that Dollar Tree needs to account for.
The hike isn't expected to go over well for Dollar Tree's loyal customers, who have come
to rely on the one-dollar-per-item model. However, as reported by Business Insider,
some experts believe that the pricing changes could lead to a better selection of higher-quality
items that are still affordable. Time will tell just how consumers adapt, or don't, to
the new Dollar Store model.
Since the 1930s, Fairway Market has served New York City with fresh foods at value prices.
But in 2020, the retailer filed for Chapter 11 bankruptcy protection with plans to permanently
close down five of its locations. As reported by CNBC, this was the second bankruptcy protection
filing for the company, the first occurring in 2016 with a quick expansion that led to
massive debt.
Essentially, small businesses like Fairway Market have difficulty keeping up with big-box
grocers that can boast vast buildings stocked with just about every food on the planet and
additional perks like salad bars, hot food stations, and online grocery shopping. In
Fairway Market's attempt to keep up, its overzealous expansion may have been its greatest downfall.
Fairway Market currently operates just five locations: four in New York City and one in
Pelham Manor. Nevertheless, CEO Abel Porter continues to remain optimistic about the company's
future, telling CNBC that it continues to negotiate buyout contracts with other companies.
As Porter explained,
"After careful consideration of all alternatives, we have concluded that a Court-supervised
sale process is the best way to meet our objectives of preserving as many jobs as possible, maximizing
value for our stakeholders, and positioning Fairway for long-term success under new ownership."
"Despite earlier newspaper reports, Fairway says it's here to stay."
Walgreens is obviously more pharmacy than grocery store. But if you need a gallon of
milk, loaf of bread, or some boxed macaroni and cheese to get through the weekend, it
can surely suffice in a pinch. It's the second-largest pharmacy chain in the United States based
on market share in 2020, but that doesn't mean the company hasn't had its fair share
of challenges. Walgreens has been on a bumpy rollercoaster ride since 2015 when it closed
about 200 locations to cut costs by $500 million. In 2018, Walgreens acquired more than 1,900
Rite Aid stores. But, as reported by CNBC, in 2019, 631 of those stores had since shut
down, and Walgreens planned to close another 119 of them. That same year Walgreens announced
its plans to close 200 United Kingdom stores and another 200 U.S. locations.
And the closures keep coming for the pharmacy giant. In October 2021, Walgreens announced
that it would shut down five stores in San Francisco due to a supposedly skyrocketing
number of shoplifting incidents across the city's locations.
"I need it to stay open because now and then, I need me some tums for heartburn."
Other areas are also getting hit with Walgreens shutdowns too, including Syracuse, New York,
and Berkeley, California.
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